Feds Bust $2 Billion Medical Fraud Rings in California
Authorities charged 15 individuals in schemes involving unnecessary surgeries, phony rehabs, and fraudulent hospice care.
Federal authorities have dismantled medical fraud operations in California totaling an estimated $2 billion. The Department of Justice announced Thursday that 15 defendants have been charged in connection with schemes that included unnecessary surgeries, fraudulent rehabilitation center billing, and fake hospice care.
Among the charged is Dr. Hany Malek, 61, a chiropractor accused of participating in a scheme to defraud Medicare of $134 million. Prosecutors allege Malek posed as a medical doctor, diagnosed patients with arterial disease, and then referred them for unnecessary atherectomy procedures. Cardiothoracic surgeon Dr. Harold Tabaie, 78, allegedly performed these procedures, sometimes on patients who did not have the disease and on whom previous procedures had been unsuccessful.
In a separate, significant case, Nathan Young, 39, and his father David Young, 71, are accused of operating a $1.6 billion scheme that targeted vulnerable individuals for substance abuse treatment. Prosecutors claim "body brokers" found addicts, including homeless people, and placed them in hotels and "trap houses" without providing actual treatment. These individuals were then billed to insurance companies as if they were receiving therapy.
First Assistant United States Attorney Bill Essayli stated that these cases represent billions in intended losses. "It is especially egregious when doctors and other health care professionals, who pledged to do no harm, resort to petty greed and criminality," Essayli said. "Every dollar drained from our private and public health insurance systems is one less dollar available to those who truly need it."
Federal SWAT teams executed predawn raids to apprehend suspects. Agents were seen scaling the fences of Malek's Tarzana mansion, employing flash-bang grenades and sirens before taking him into custody. Neighbors described Malek as someone who lived a high-flying lifestyle, supported by a fleet of luxury cars and boats.
Other defendants were charged for operating fraudulent hospice programs and engaging in illegal kickback schemes related to unneeded genetic testing.
Federal authorities indicated that investigations into all cases are ongoing and that more information would be provided at a press conference. As of Thursday, it was unclear how many of the defendants had been apprehended.